Unilever closes facility as part of regional outsourcing plan

Related tags Peanut butter Sauce Cooking

Unilever Philippines has said that it will shut down its Las Piñas
food production plant as part of moves to increase regional
efficiencies through outsourcing.

The plant - which was constructed 15 years ago and employs nearly 200 people involved in producing peanut butter, cooking sauces and pasta - a comprehensive field study proved that the plant was uneconomic to run due to operational inefficiencies that could be counterbalanced by outsourcing.

The report came to the conclusion that the facility was underutilized and that production was not diversified enough. "There is scope for better utilization in the region,"​ it said.

The plant is mooted for permanent closure in April or May next year, after which time the production of peanut butter, cooking sauces and pasta will be outsourced to other Unilever production facilities in China and Indonesia. The company added that several brands, such as Knorr flavouring mixes, would be outsourced to local manufacturers in the Philippines.

Ultimately the move aims to save the company approximately PHP 100 million (€1.37m).

However, Unilever's​ regional outsourcing strategy is not going to be all bad news for its operations in the Philippines. Unilever officials have also said that production of Best Foods mayonnaise will be concentrated in the Philippines, from where the leading brand will be supplied to all markets in the Asia Pacific region.

A company spokesperson said that its seven-year-old plant in General Trias, Cavite, will soon become a regional focus for sauce production, including the Best Foods mayonnaise brand. Currently the facility employs 100 people, but increased investment in the production facility is expected to increase the size of the facility significantly.

Related topics Processing & packaging

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